Main principles for compiling quarterly financial accounts

Basic principles for compiling quarterly financial accounts are defined under the European System of Accounts (ESA 2010).

A complete quarterly financial account entry for one period comprises the following:

outstanding amount at the end of the previous period

+ transactions

+ exchange rate fluctuations

+ price changes

+ other changes

= outstanding amount at the end of the reporting period

An outstanding amount is the amount of financial instruments at a particular point in time.

A transaction is the value of a creation or liquidation of, or exchange with financial instruments between institutional units.

Net financial worth is the difference between the total outstanding amounts of financial instrument assets and those of financial instrument liabilities, while net financial transactions represent the difference between the total transactions in financial instrument assets and those in financial instrument liabilities.

Revaluation and other changes are those occurring in the outstanding amount values as a result of exchange rate fluctuations or price changes in the respective time period or due to changes in classification, structure or respondent accounting methods.

The whom-to-whom data or the financial account by debtor/creditor is an extension of the non-consolidated financial account. It is a three dimensional presentation of financial transactions where both parties to a transaction are shown, as well as the nature of the financial instrument being transacted. The whom-to-whom data are compiled on deposits, loans, debt securities, listed shares and investment fund shares.

Financial instruments are economic assets comprising means of payment, financial claims and claims which are close to financial claims in nature. Financial instruments are broken down mostly by their liquidity.

Financial instruments are measured at market prices; transactions are recorded as at the time of their creation; double/quadruple entry accounting principle is used for entries (i.e. each change has to be recorded by the institutional unit in the accounting records twice, while, for financial account statistics, each change with the same values between institutional units has to be recorded four times – twice for each institutional unit).

Quarterly financial accounts are non-consolidated. It means that all transactions arising between institutional units are recorded, while not excluding mutual financial instrument transactions.

In the quarterly financial accounts, institutional units are grouped by sector or subsector depending on the principal activity and function of the institutional unit. Each institutional unit belongs to only one sector or subsector. In Latvia, the list of institutional units is maintained by the Central Statistical Bureau of Latvia.